Feds vow probe of food industry practices

ANKENY, Iowa – U.S. Attorney General Eric Holder and a team of top federal officials on Friday pledged a sweeping examination of alleged monopolistic practices in the food sector, and promised to bust those who violate antitrust laws.

But it was the issue of competition – and veiled nods to the government’s current probe into seed giant Monsanto Co.’s marketing practices – that emerged as a dominant theme of the day.

Speaking at a public workshop organized by the Justice Department and the U.S. Department of Agriculture at a community college, Holder told the packed conference hall that “concrete action” would emerge from the unusual coordination between the two federal agencies.

The gathering was the first of a yearlong series of public meetings to examine whether consolidation in the food sector, and alleged monopolistic practices in agriculture, are driving food prices higher.

The government is also trying to ferret out reasons for the sometimes vast gaps between what farmers are paid for producing food and the retail prices that shoppers pay at the grocery store. Time and again, federal officials underscored how the government was going to push for more transparency in the food sector’s business practices.

Many farmers in the audience expressed concern about rising prices for seed needed to grow crops such as corn and soybeans. The seed industry has consolidated in recent years, leaving just a handful of large players that now dominate the market. Farmers have been pressuring lawmakers to investigate seed pricing, particularly for varieties produced by Monsanto, the world’s largest seed company. U.S. farmers spent about $17 billion on seed last year, up 56 percent from 2006, the USDA said.

None of the federal officials mentioned Monsanto by name. But Assistant U.S. Attorney Christine Varney, Holder’s antitrust chief, acknowledged that such consolidation can lead to problems. “Big is not bad,” she said, “but with big comes an awful lot of responsibility.”

The Justice Department is investigating Monsanto’s marketing practices. And at least three state attorneys general have begun probes into whether the St. Louis company has abused its market dominance to undermine rivals and raise prices.